2/06/2012

INTERNAL MARKET FIRST. (Prima il mercato interno)

Gazprom said on Saturday it could not pump additional gas to Western Europe amid a cold snap, after EU officials and energy firms said the Russian giant's deliveries had dropped in several states.

"Gazprom at the moment cannot satisfy the additional volumes that our Western European partners are requesting," the company's deputy chairman Alexander Kruglov said at a meeting with Prime Minister Vladimir Putin, according to Russian news agencies.

Putin told Gazprom at the meeting that the demands of Europe had to be respected but the firm's priority was to supply consumers in Russia, which is also enduring a spell of very cold weather.

"I ask you to make efforts to meet the demands of our foreign partners, bearing in mind that the prime task of Russian energy firms and Gazprom in particular is to satisfy the internal demand in Russia," said Putin.

"This is the priority task."

Kruglov said that Gazprom was carrying out deliveries in line with its agreements with European states but that it was unable to pump additional gas that had been requested.

He said there had been a reduction of 10 percent in gas volumes delivered on previous days but that now deliveries had returned to their normal levels.

The European Commission said Friday that Austria, Bulgaria, Germany, Greece, Hungary, Italy, Poland, Romania and Slovakia had each registered drops in gas supplies.

But a spokeswoman for EU energy commissioner Guenther Oettinger, Marlene Holzer, had said that Gazprom contractual small print with European buyers "allows for a certain flexibility."

German energy giant RWE said it was currently receiving 30 percent less gas from Russia than is foreseen in contracts.

"Supply for clients is however assured, notably due to well filled stocks," a spokesman said, adding there would be no problem in the days to come.

Its main rival E.ON, which obtains 27 percent of its gas annually from Gazprom, said it was "well-armed against reductions in supply from Gazprom", even if demand was high for a long period, due to high stock levels.

Russian gas amounted to 33 percent of Germany's supplies in 2010, its main source of gas imports ahead of Norway with 29 percent.

The economy ministry of the Netherlands meanwhile said the country produced sufficient gas itself and had sufficient reserves "to face all the needs".

"We have other possibilities of supply," said spokeswoman Esther Benschop, saying the country had "great flexibility" in gas.

Austria on Friday had logged a 30 percent fall in Russian deliveries and Italy had seen deliveries fall by 24 percent. Deliveries to Italy's gas network Snam Rete Gas were down 28.9 percent on Friday.(JakartaGlobe)